 ▲ U.S. Core CPI Slows…Is Bitcoin’s Rebound a Genuine Signal?/ChatGPT-generated image |
Market attention is focused on whether the rebound in Bitcoin is linked to the U.S. core Consumer Price Index (CPI) for January.
According to data released on the 13th (local time), the U.S. Consumer Price Index for January rose 2.4% year-over-year, marking the lowest increase in eight months. On a monthly basis, it climbed 0.2%, below market expectations of 0.3%. Core CPI, which excludes volatile food and energy prices, increased 2.5% year-over-year, the lowest level since March 2021, nearly four years and ten months ago, and rose 0.3% month-over-month, in line with forecasts. Housing costs rose 0.2% from the previous month, contributing the most to the increase, while energy prices fell 1.5%.
This moderation in prices is interpreted as easing concerns over a reacceleration of inflation. In particular, inflation, which had climbed to 3% last September amid the impact of the Trump administration’s tariff policies, has now fallen back to the mid-2% range, signaling a reduced burden on the Federal Reserve’s monetary policy path. However, with January employment data coming in stronger than expected, the market remains cautious about the possibility of additional rate cuts in the first half of the year.
U.S. stock markets swung sharply following the inflation release before ending mixed. The Dow Jones Industrial Average rose 0.10%, and the S&P 500 gained 0.05%, while the Nasdaq Composite fell 0.22%. Despite the softer-than-expected CPI, it failed to act as a strong bullish catalyst. Volatility intensified intraday due to position adjustments ahead of the Presidents’ Day holiday and algorithmic trading. According to the CME FedWatch tool, the probability of rates remaining unchanged in March was priced at 90.2%, and the CBOE Volatility Index (VIX) edged down to 20.60.
Against this backdrop, Bitcoin (BTC) is seen as having rebounded alongside the broader recovery in risk assets following the inflation data release. Softer inflation may ease pressure for a stronger dollar and reignite expectations of rate cuts, potentially serving as a psychological buffer for digital assets. However, given the mixed close in U.S. equities, it is difficult to attribute the rebound solely to the CPI data, and bargain hunting and short-term position adjustments may also have played a role.
Ultimately, the key question is whether the slowdown in inflation will prove temporary or continue as a trend strong enough to shift the Federal Reserve’s policy stance. With inflation still above the Fed’s 2% target and growth and employment remaining resilient, the crypto market is likely to continue experiencing volatility driven by macroeconomic variables for the time being.
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